Tesla stocks fall more than 12% due to competition

The stocks of Tesla fell more than 12% on Thursday after the company announced that its sales growth in 2024 will be slower than last year.

According to the media reports, the market value of Tesla stocks has been reduced by $80 billion.

Elon Musk, the CEO of Tesla Motors, predicted that the company’s sales growth “may be notably lower” in 2024 despite decreasing prices. The carmaker’s quarterly earnings, which were made public on Wednesday, likewise failed to meet expectations from Wall Street. To maintain its competitiveness in the face of intense competition from Chinese rivals like Build Your Dream (BYD) and automakers, the company has been cutting prices in key international markets including China and Europe.

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Demand has also decreased due to the ongoing high cost of borrowing, which is a result of central banks throughout the globe keeping interest rates high to combat inflation. Tesla claims that its profit margin has decreased as a result of price reductions, higher R&D costs, and costs associated with stepping up manufacturing of the new Cybertruck.

In addition, the company said that it was in the middle of two significant growth waves and that it would start making a new, less costly car in the latter half of the next year. Furthermore, Musk cautioned investors that Chinese competitors will essentially destroy the majority of other automakers worldwide if trade curbs are not put in place.

After BYD overtook Tesla as the world’s best-selling electric vehicle manufacturer in the last three months of 2023, he began to support trade restrictions in the highly competitive industry. After years of explosive growth, Tesla has issued a slowdown warning, citing a global decline in demand for electric vehicles as the reason. The value of Tesla’s shares has currently decreased by more than 25% so far this year.